The Benefits of Moving Back Home

Many college graduates won't be scrolling through Craigslist ads and FacebookFB-1.26% posts for new roommates this spring. That's because they already know theirs—Mom and Dad.

Although the economy is on the mend, a still-tight job market in many areas and a load of student debt will force many 20-somethings to move back home this spring—and stay for a while. And they'll be joining plenty of last year's graduates who still can't afford to move out on their own.

ENLARGE

Paulo Buchinho

But financial experts say young adults can use a return to the family nest as an opportunity to focus on paying off debt and start a savings plan for both the short and long term.

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"Because you're not paying rent [or are paying low rent to your parents], it's a chance to make sure you quickly get on the right financial foot," says Alexa von Tobel, founder of LearnVest.com, an online provider of financial-planning services and education for young adults.

The first thing you should do is sit down with your parents and discuss what will be expected of you—financially or otherwise, says Meg Jay, a psychologist in Charlottesville, Va., and author of "The Defining Decade: Why Your Twenties Matter, and How to Make the Most of Them." You need to agree on which bills you'll pay, how you'll handle any debt (say, student loans and credit cards), how much you'll set aside for savings and, of course, a timetable for when you will eventually move out. This allows you to take ownership of your finances and develop responsible habits even if you're not yet financially independent. Plus, being on the same page as your parents will help minimize any household tension.

How you go about this will, of course, depend on your employment situation. If you've landed a job right after graduation, you should start paying for your personal expenses—cellphone bill, car payment, insurance and gas among them—as well as aggressively paying down any debt.

John Schuller returned home after graduating from Illinois State University in December in order to save money. He started working at a Chicago immigration firm in February and pays for expenses including a gym membership and motorcycle registration and insurance. He will soon start making student-loan payments as well.

Working young adults also should contribute to the household budget in some fashion. Mr. Schuller, 22, says he puts gas in the family car and fixes household appliances that are on the fritz. At a recent family outing for breakfast near his home in Darien, Ill., he picked up the tab.

If you're moving back home to attend graduate school, the rules should still apply—in some form. Sarah Bialecki moved back home to Monroe, Mich., after graduating from Central Michigan University in spring 2011, to pursue a graduate degree in occupational therapy. The 23-year-old works part-time as a switchboard operator to pay for her personal expenses, such as gas, textbooks, food and tuition, not covered by federal student loans.

And if you're returning home without a job, your No. 1 task should be to find one. "You need to get a job—any job," says Harlan Cohen, syndicated advice columnist and author of books for young adults and parents. This includes landing part-time or summer work while you actively network and look for a full-time spot.

Once you have a handle on your expenses, start saving—a lot. Start by building up emergency savings equivalent to three to six months of your take-home pay (or if you're not working full-time, your expenses), says Kimberly Foss, a wealth adviser in Sacramento, Calif.

Then start thinking long term. If your employer offers a 401(k) retirement saving plan, contribute at least enough to get a company match, if there is one. Also, open up a Roth individual retirement account (maximum contribution for 2013 is $5,500).

And what if you've been doing all of these things for a year or so, and still can't afford to leave the nest? Try an enforced savings plan with your parents, says Ms. Foss. Pay your parents a set amount each month to cover, say, rent, utilities and groceries. Have them set aside the money until there's enough saved up for you to move out.

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